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WOODSFIELD, Ohio - They were the envy of this small Appalachian town, fawned over like
celebrities when they walked into restaurants.

And why wouldn't they be?

They were sales representatives at the SafeAuto Insurance call center, which opened in 2001, and
were expected to quickly become among the highest-paid people in this eastern Ohio, working-class
town of 2,600. Some of them would earn as much as $100,000 a year by selling car insurance over the
phone to drivers seeking state-minimum coverage.

"If you were working at SafeAuto, that means you have to have money," said John Lucio, one of
the first workers the Columbus insurer hired for the call center.

But he doesn't work there anymore. For many workers, dreams of expensive vacations and pricey
cars and homes turned into foreclosure notices and unpaid bills.

The company had told them and their peers at a similar call center in Columbus that their
earnings potential was unlimited. By 2004, those words had been reversed and commissions had been
slashed.

The cuts hit the sales representatives with a one-two punch. It reduced commissions they
could collect on new policies they sold and on the renewals of policies they had generated in the
past.

As a result, many workers' income dropped to $25,000 or $30,000 a year.

Led by Lucio, workers sued in 2007, arguing that while the company had the right to cut
commissions on new policies they sold, it could not cut commissions on renewals. They also said the
company wrongly kept renewal commissions owed to representatives no longer with the company.

A Monroe County judge agreed, last month ordering the company to pay $11.7 million in damages to
180 current and former sales representatives at call centers in Woodsfield and Columbus. If the
judgment holds up on appeal, it could grow as high as $15 million with interest, meaning some
workers stand to collect checks of as much as $150,000, Lucio said. The company has promised to
appeal.

SafeAuto officials would not comment on the company's compensation practices because the case is
still pending.

"Hopefully, this will all be resolved eventually, and we can put this negativity behind us,"
Mark LeMaster, the company's senior vice president and general counsel, said in an e-mail.

Changing climate

Disputes between insurance companies and their agents over changes in compensation are not new,
but they don't usually become this public, said Jeff Rieder, president of the Ward Group, a
Cincinnati consulting and research firm.

When insurers find it difficult to compete on price with others in the industry, they sometimes
have to cut agents' pay to trim expenses, he said. Those changes often have resulted in
lawsuits.

At SafeAuto's call center in Woodsfield, the sales agents were promised a commission of 4
percent on new policies they sold and those that were renewed. The company cut the commission to
2percent in January 2004 and then to 1 percent in August 2005.

For sales representatives in Columbus, commissions went from 4 percent to 5 percent and then
were cut to 1 percent in 2005. Monroe County Common Pleas Judge Julie Selmon previously ruled that
the commission policies detailed in employee handbooks were contracts between the company and the
sales agents.

At the same time commissions were cut, workers say, the company's attitude toward
employees changed. They said it had been a fun place to work, where workers routinely were rewarded
for exceeding sales targets. In the new environment, they said workers were disciplined harshly,
whether for spending too much time on the phone with a customer or missing too much work for family
or medical problems.

One sales representative, Shelly Meisel, 40, said she was fired after other workers at the call
center asked her to lead an effort to form a union. She said she was told by the manager, "If you
think about starting a union, we'll shut down the office." The company said she was fired in 2005
for contacting state and local political officials about a confidential company memo.

After she was fired and word spread through the small town, Meisel said, no one would hire her.
She and her husband collected soda cans along roads to generate cash to pay their $175-a-month
mortgage until she recently landed a job as a home health-care aide.

Worse than anything, the workers say, is that morale is low and the respect they once had in the
community is gone.

"It's just a shame what the company has done to the people who made it what it was," said Judy
Hill, a former employee.

Opportunity knocks

SafeAuto, known for spokesman "Justin Case" and the slogan "We Keep You Legal for Less," ran an
advertisement during the Super Bowl in which a man is repeatedly kicked in the crotch as an
announcer says that's what it feels like to drive without insurance.

That might be a little dramatic, but it says a lot about SafeAuto's core customers.

SafeAuto was founded in 1993 by Ari Deshe and Jon P. Diamond - two Columbus men who saw an
opportunity to capitalize on a market of drivers who need insurance to comply with state laws.
Deshe is the company's chairman and CEO; Diamond is president.

The concept is working at SafeAuto, which operates in 15 states and turned a $21 million profit
in 2009 on premiums of $345 million, according to state insurance records.

Minimum coverage for less also means the company needs to keep costs very low, said Rieder, the
Cincinnati consultant. That's why SafeAuto and other insurers like to set up call centers in rural
areas where unemployment is high, Rieder said.

Monroe County, with a population of 14,000 people along the Ohio River near West Virginia, fills
the bill. It routinely has had one of the higher unemployment rates in the state, hitting 12.8
percent in December.

Call-center workers in rural areas command far lower salaries - typically $25,000 to $35,000 a
year - than those in urban areas who do similar work, Rieder said. Besides saving money, companies
typically are awarded tax incentives to build the call centers.

In addition to its Woodsfield and Columbus locations, SafeAuto has call centers in Somerset,
Ky., and Hemingway, S.C.

SafeAuto moved its corporate offices from the Whitehall area to the Easton Oval - it also was
considering Arizona - after the state agreed to give the company tax credits valued at $1.4 million
and a $300,000 training grant in 2005.

The call-center jobs typically are not meant to make a career for those who take them, Rieder
said. Turnover is high, workers' activities are closely monitored, and employees tend to be younger
or those who want to supplement a family income, he said.

When told how much the sales representatives made in the early years at the Woodsfield call
center, Rieder said, "We would tell them that they had a very inefficient cost structure."

Last July, the company laid off 47 workers, citing a weak economy that had led customers to
reduce their insurance.

"While we also believe such economic forces are cyclical by nature, we must remain as efficient
as possible when times are tough - as they have been for some time," April Miller, the company's
senior vice president of human resources, said in a memo distributed to workers and obtained by
The Dispatch. "Simply put, this means we must spend less money now so we are as
competitive as possible when things turn around."

The sky's the limit

Newly minted insurance sales agents were told to dream big when they started work in 2001 at the
Woodsfield call center, that there was no limit on how much money they could make.

They were encouraged to keep pictures of the things they wanted - cars, boats, vacations - close
at hand on their desks in a three-ring binder, called a "wish book" or "dream book." Managers would
routinely drop by workers' desks to look at the books to see if anything had been added.

Workers would routinely put in 60 hours a week or more to achieve their dreams. They loved going
to work.

"You are an insurance agent making $5,000 a month," Lucio, 37, said he was once told by a
manager. "Act like one."

So he did. He bought a house. He bought a new GMC pickup truck for $33,000. "For the first time
in my life, I didn't have to worry about money," he said.

Regina Winland, 48, saw her pay jump from $25,000 in the first year she worked for SafeAuto to
almost $50,000 within a couple of years. "It was good. It was easy," said Winland, who left the
company in a dispute over medical problems she continues to have.

With 113 sales representatives, customer-service workers and other workers, the company is one
of the bigger employers in the county, said SafeAuto's LeMaster, who called the work force there
"competent and energized."

"Quite simply," he said, "we are providing jobs that include highly competitive wages and
benefits that have not typically been available in the county for many years."

Local business owners agree.

"I think it has been a big asset to the county," said Mike Knowlton, owner of Knowlton Ford in
Woodsfield.

Knowlton said the additional jobs have meant more business for grocery stores and restaurants,
and that has put more money in the pockets of other workers in the area - who end up buying
cars.

"Anytime there is a nice-sized, good job out there, I look at the spinoff from it," he said.

The first cut in sales commissions came in January 2004, just weeks after Lucio closed on a
$75,000 house in Woodsfield. There would be another cut in 2005 that, combined with the first
reduction, cut commissions on policies to 1 percent from 4 percent.

Lucio said the company told workers that it needed to reduce commissions to pay for more
advertising and help the company expand. Workers said they think commissions were cut because the
company was surprised at how well the sales representatives did.

After making close to $60,000, Lucio said his pay fell to $30,000 the last year he worked for
the company. Hill said her annual income dropped from $60,000 to $20,000 before she quit.

"I had a lot of adjusting I had to do and some bills I couldn't pay," she said.

Still, she held up better than many other workers.

"When they got a taste of that money and a promise that it would always be there, you bought
things," Hill said. "If they would never have promised the world, we would never have expected
it."

Lucio said a bank foreclosed on his home in Canton, where he lived before moving his family to
Woodsfield so he could work for SafeAuto. His home in Woodsfield was sold while it was in
foreclosure, and he crashed his truck while two months behind on the payments. Insurance paid much
of what he owed on the truck.

Other workers lost homes and cars or ended up in bankruptcy as unpaid bills piled up, the
workers said.

The cuts were a factor in a doubling of foreclosures in Monroe County. They went from 23 in 2002
to 45 in 2006, according to Ohio Supreme Court records. Sales-tax collections by the county, which
totaled $1.3 million in 2001, according to state tax records, remained below that level until
2007.

The lawsuit

Lucio first thought about suing as he negotiated a severance package when he was quitting
SafeAuto. The package would require him to give up his right to sue.

"I knew something wasn't right," he said.

He knew that the company had the right to reduce commissions on future policies but couldn't do
so on renewals.

"Nobody says they can't change the formula for doing business," said Mark Ropchock, the Akron
lawyer handling the case for the workers. "They just can't do it retroactively."

Ropchock said it has been clear from the beginning that the company broke the contract it had
with the workers, yet SafeAuto continues to aggressively fight the case.

"It's how they do business," he said. "I guess that's their right. ... Anyone else would have
settled."

Rieder said other insurers would do the same as SafeAuto, partly because they believe they're
right and partly to avoid setting a precedent that could encourage more lawsuits.

"That's always a concern of insurance companies," he said.

He said privately owned insurance companies such as SafeAuto tend to be more focused on profit
and more aggressive about managing employees.

"They're not willing to deal with poor behavior," Rieder said.

The 180 people covered by the Monroe County ruling aren't about to see their finances improve
just yet. Because of the promised appeal, it could be 2012 before they see any money - if the
ruling is upheld.

Workers say that because of the lawsuit, the company has threatened to walk away from Monroe
County. The company says that isn't true.

"We can state unequivocally that we have never had any discussions about leaving Monroe County,"
LeMaster said.

Lucio, who is pursuing a degree to become a physical therapist, figures that by the time he gets
his share of the proceeds from the case and pays back everyone he owes, there won't be anything
left.

He said he would have been in better shape financially to have stuck it out with SafeAuto, even
with the pay cuts.

He and other workers say that, despite their frustrations with SafeAuto, they retain fond
memories of the work they used to do.